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Worth noting that the mainstream macroeconomic wisdom has been completely disconnected from what we've observed in reality the past 10 years or so -- having rat
by jbooth 11y ago
Worth noting that the mainstream macroeconomic wisdom has been completely disconnected from what we've observed in reality the past 10 years or so -- having rates this low for this long is supposed to spur demand and create inflation, according to mainstream macro, right?
- auntienomen 11y agoGiven high demand, yes. But demand hasn't been high.
- lintiness 11y agolow rates have spurred demand and inflation RELATIVE to where they would have been at much higher rates.
- shawn-furyan 11y agoI think mainstream macro acknowledges that negative rates can be needed to spur demand even though there isn't a good mechanism for achieving negative rates. The zero bound is pretty much a 'natural' restriction that doesn't have anything to do with just how much people want to hang on to their capital in times of uncertainty.